(Related story on page 21)By Yoon Ja-youngIncome polarization between the rich and poor has widened to the worst level in a decade, with the government's income-led growth policy failing to lead to fatter paychecks for those in middle- and low-income brackets.The increasing income gap came as the nominal income of those in the lower income bracket continued dropping in the second quarter, while those in the highest income bracket saw their incomes soaring.According to Statistics Korea Thursday, the monthly average household income increased 4.2 percent to 4.53 million won ($4,038) in the second quarter, marking the steepest rise since the first quarter of 2014.However, those in the bottom 20 percent income bracket saw their nominal monthly income contract 7.6 percent from a year ago to 1.32 million won. This is the biggest drop for a second quarter in the 15 years Statistics Korea has been compiling data.They especially saw wages contract 15.9 percent. Their income from business also dropped 21 percent.Those in the 20 to 40 percentile income bracket also saw a nominal income decrease of 2.1 percent to 2.8 million won.Analysts say the contracting income was somewhat anticipated as a result of the steep minimum wage hike. "Jobs decreased in wholesale and retail as well as restaurants and lodgings, where those in the low-income bracket mostly work. The average income was expected to drop as the job indices have been worsening," said An Young-jin, an economist at SK Investment and Securities. The number of newly added jobs per month dropped to 5,000 in July from around 100,000 earlier in the year."The minimum wage hike was aimed at benefiting low-income households, but it decreased the number of jobs more than the increase in wages," he said. The country is raising the minimum hourly wage by double digits this year and the next to increase the income of the low-income bracket, but the too-steep hike ended up with employers decreasing hiring. The nominal income of those in the top 20 percentile bracket, meanwhile, surged 10.3 percent to 9.13 million won, marking the steepest rise since 2003. The gap between the haves and the have-nots has only widened as a result. The top income bracket's disposable income was 5.23 times larger than that of the bottom 20 percent, which is the widest gap since the second quarter of 2008. It has been worsening since 2015 when the top earners had 4.19 times more than the lowest bracket.The income gap isn't likely to narrow. Most of all, the economy is not in good shape."When excluding the semiconductor industry, the economy is in poor condition. This administration, however, seems to believe the economy is faring well, only seeing the 3.1 percent growth achieved last year," said Shin Se-don, a professor at Sookmyung Women's University, pointing to problems the manufacturing industry faces.He said the minimum wage hike was like adding a typhoon to already bad weather. "The self-employed will have to close down or reduce their number of employees."Those in the bottom income bracket also saw the number of close family members with jobs drop 18 percent from a year ago.The middle class is also limping. The average monthly income of those in the 40 to 60 percentile income bracket dropped 0.1 percent to 3.94 million won, which is the first drop since the first quarter of last year. They saw business income drop 7 percent, reflecting that many of the self-employed are shuttering their businesses. According to the National Tax Service, 166,000 restaurants closed last year while 181,000 opened.No policy shift expectedThe administration, however, is likely to continue with the income-led growth strategy. Presidential chief of staff for policy Jang Ha-sung affirmed his support for it, saying "the minimum wage hike is only a part of the income-led growth strategy."Jang said further analysis is needed to determine whether the minimum wage hike has affected employment numbers."Jobs started to decrease in restaurants from May and June of last year, not this year," he said Tuesday at the National Assembly's special committee on the budget, adding he doesn't agree the minimum wage hike caused the job market disaster.Economy and Finance Minister Kim Dong-yeon said the government will increase the budget by a record amount to sustain jobs."The government will promote an expansionary fiscal policy to create jobs, improve income distribution and accelerate innovative growth," he said at a consultation meeting with the governing Democratic Party of Korea, Thursday, over the budget plan for next year. He said a job stabilization fund will be created for small merchants and the self-employed who have suffered from the minimum wage hike.Economists, however, doubt whether an increased budget will create jobs. "The government is wrong in its approach to tackle the problem," Shin said. "A bigger budget won't help at all."